![]() ![]() ![]() It also helps them to stabilize their export earnings from twelve agricultural commodities through a scheme called Stabex. This gives 57 countries in Africa, the Caribbean and the Pacific-the ACP countries- concessions on tariffs to the extent that 99 per cent of their exports to the EEC will be duty free. It accounts for a third of world trade and about 45 per cent of trade in manufactured goods.įive of the members of the EEC are former colonial powers and many of the developing countries which were formerly their colonies have associate status through an agreement called the Lome Convention. Despite difficulties with the Common Agricultural Policy the EEC has been very successful. Stocks must either be destroyed or sold at low prices, e.g. Beef and wheat are also overproduced and have to be stockpiled. Each year we hear of a ‘butter mountain’ or ‘milk lake’. This has encouraged farmers to increase in efficiency and many agricultural products are overproduced. Farmers receive guaranteed prices for their products which are usually high. Integration of agricultural development has been and will probably be the biggest single problem, since many of the member states have large agricultural populations and farming is highly protected. ![]() Most restrictions on trade in industrial goods were removed by 1967, however, and a common external tariff had come into operation. This had to be done gradually to allow the economies of the various countries to adjust to the changes. In 1981 Greece joined the Common Market and some other countries including Spain, Portugal and Turkey may eventually enter the association.Īlthough established in 1957 the Common Market did not immediately abolish all tariffs and restrictions. However, by 1973 trading conditions had changed and at that time Britain, Denmark and Ireland joined the EEC. Britain had close trading ties with Commonwealth countries. At first Britain and other European countries did not feel it was in their best interests to join, e.g. It was founded in 1957 by the Treaty of Rome, the original six members being France, West Germany, Italy, Belgium, Netherlands and Luxembourg. This is both the tightest association and the one which has progressed furthest in trade and general economic integration. The European Economic Community (Common Market): It is therefore interesting to look at each major group separately.ġ. There are several trading blocs in the world today and though they all have broadly similar aims, there are great differences in purpose and progress achieved from one to another. ASEAN (Association of South-East Asian Nations) encourages economic and political co-operation in South- East Asia. ![]() Thus the formation of an association in which the European countries can work together will lead to less friction and greater chances of world peace. The main reason for this is that the long-standing rivalry between the various European powers has led to two world wars which have greatly disrupted world trade. Trading blocs such as the Common Market have as a long-term aim some form of political unity. Free trade is impossible on a world scale but within a trading bloc it is possible and industrial and agricultural specialization can take place, with benefits in the cheapness and efficiency of production. As internal trade has grown so the external trade of the Common Market has increased substantially, though not as fast as internal trade.įree trade policies allow for more specialization of production in the areas best suited to the making of particular products. This allows for larger-scale and more efficient production which in turn allows members to produce more goods more competitively for export outside the trading bloc. When trading restrictions are reduced and goods can pass easily from one country to another, manufacturers within the bloc can reach a much larger market than any single country could provide. Looser trading associations do not enjoy this advantage to the same extent, but some, such as LAFTA (Latin American Free Trade Association), have been formed partly to increase the bargaining power of raw-material producers in their dealings with the industrial consumers. The Common Market, regarded as a single unit, has a productive capacity and a population almost as great as that of the U.S.A., and as economic and political integration progress its importance as a world economic and political power will increase. By forming a close association which can be regarded as a single unit by other countries and trading organizations, the member nations of trading blocs gain greater economic strength and greater bargaining power in world markets. ![]()
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